How 'Game of Thrones' can help your investment decisions
The well-written Game of Thrones books by George RR Martin are full of engaging dialogue and memorable quotes. Quotes that are fast becoming part of popular culture even after the television series wound to a close earlier this year. Quotes that thrill writers for their simplicity and insightful observations that can be applied to most scenarios in life and even to the investment world.
"Chaos isn't a pit. Chaos is a ladder." - Lord Littlefinger to Lord Varys on power and his intention to seize it.
This cuts to the heart of opportunity in the investment world. Just as Warren Buffett advises that you should look for well-priced opportunities when markets fall, the current downturn in the markets could easily be seen as an opportunity if you want to start using discretionary money to invest or if you are new to the investment world.
Locally, the International Monetary Fund has lowered SA's projected GDP growth rate for 2019 from 1.4% to 1.2%, putting the country among the worst performers in Sub-Saharan Africa. Though this is disappointing, it can provide the impetus for growth as there's always opportunity for entrepreneurs where there is inefficiency.
"You know nothing, Jon Snow." - Ygritte's catchphrase of sorts for her sometimes enemy/sometimes lover.
While a downturn presents an opportunity for the new investor, those already in the market are not advised to try to "time the market". In this case, the above phrase easily applies. There is no concrete method to predict how stocks are going to move, or the fortunes of companies. Trying to time the market is ill-advised and presumes that you know better than millions of other investors, fund managers and advisers the world around. Rather stick to a long-term investment plan and ignore the short- to medium-term drops in the market that equate to nothing more than paper losses, if you hold your position.
"The day will come when you think you are safe and happy, and your joy will turn to ashes in your mouth." - Tyrion to his sister Cersei.
Never take anything in the investment world for granted. No matter how sure you are of a good investment, make sure that your portfolio is diversified so you have some protection if an investment fails. Steinhoff is a great example of a stock that was widely viewed as a sure bet and even touted as a blue-chip stock before it fell spectacularly, exposed as a house of cards.
"The night is dark and full of terrors." - Melisandre and others who follow the Lord of Light.
To the uninformed investor, the investment world can seem dark and full of terror, which is why you should seek out the services of a qualified, certified financial planner to walk you through the process and help you stay on track to achieve your financial goals. Your planner can help you draw up a holistic financial plan and serves as your sounding board in times of turmoil.
"A Lannister always pays his debts." - The official family motto or "words" of House Lannister.
This is a great motto when it comes to pure money management skills. Credit can be a curse or a blessing depending on how responsible you are. Like a Lannister, you should stay on top of your debt and manage different types of debt appropriately so that you pay the least interest necessary.
"A lion does not concern himself with the opinions of sheep." - Tywin Lannister.
There is almost always a great deal of "noise" in the investment universe. This could be anything from a company scandal to the hot stock of the day. Your focus should be on your long-term investment plan that has been logically thought out and put together by you and your financial planner.
So, to sum up, I advise you to keep calm and retain a bigger-picture view with your long-term investment plan in mind, which will ensure that your investment goals reach a satisfactory conclusion - preferably one more satisfying than the season eight finale of Game of Thrones, which had many disgruntled fans complaining online and even launching a petition for a rewrite.
Hugo is the director of Sterling Private Wealth and the Financial Planner of the Year for 2018